Imagine having to make a small sum of money last an entire month, ensuring that there is money available at the right time for rent, food, school fees, and other incidentals. Anyone who has tried to get by on a limited budget will know how hard this is; winding up with not quite enough as the end of the month approaches is a common enough occurrence.
Yet when government programs transfer money to poor people, they often assume that those getting the funds are perfect planners. In reality, recipients often struggle to regulate their spending to last from one payment to the next; spending peaks immediately after payments are received, and resources are depleted until the next payment. For individuals with low income and few alternatives to help make ends meet, these gaps in payments have real, damaging consequences.
In partnership with Chapin Hall at the University of Chicago, Lisa Gennetian, a former ideas42 Managing Director, examined whether the timing of Supplemental Nutrition Assistance Program (SNAP) benefits, commonly known as food stamps, was related to disciplinary events recorded among students in public middle schools in Chicago. The study found that the incidence of disciplinary events was nearly 50 percent higher at the end of the month, when benefits has typically run out, than at the beginning of the month among students in families on food stamps.
Re-thinking when benefits are dispensed should enter policy debates about strategies for supporting poor people. Instead of benefits being paid on a monthly cycle, forcing financially-stressed families to also budget, increasing the frequency of payments may be a promising, cost-effective approach to alleviating the negative effects of hunger and financial strain.